Factor or Industry Cleavages in Trade Policy? An Empirical Analysis of the Stolper–Samuelson Theorem

Abstract

If factors of production are mobile between industries, the Stolper–Samuelson Theorem predicts that cleavages over trade policy will form along factor lines. Conversely, if factors are immobile, cleavages will form along industry lines. These two hypotheses are empirically examined using micro‐data from a survey conducted during the 1988 Canadian federal election—a de facto referendum on free trade. Factors of production are found to be important determinants of preferences on trade policy. However, the industry of employment also helps determine preferences on trade policy. These results are consistent with partial factor mobility.

Revisiting the evidence on trade policy preferences

“…These findings that both skill and industry matter contrast with Slaughter (2001a and2001b), but are consistent with Beaulieu's (2002a) results using Canadian survey data, and suggest that labor is neither perfectly mobile nor perfectly immobile. 9 7 I get qualitatively identical results to Scheve and Slaughter for all specifications reported in their paper, but just show these for the sake of brevity.…”

“…A more recent literature has begun to examine these hypotheses using individuals' votes or stated preferences on surveys about free trade and trade protection, including Balistreri (1997), Slaughter (2001a and2001b), Beaulieu (2002a), and Mayda and Rodrik (2006).…”

When working is not enough: food insecurity in the Canadian labour force

“…To find that industry of employment determines food insecurity risk after accounting for skill level suggests that workers are not mobile across industries. This lack of inter-industry mobility has been identified in studies examining the impact of Canada-USA free trade on Canadian workers (19,20) . We also found an over-representation of Aboriginal and visible minority groups among the working food insecure, consistent with their over-representation in the food-insecure population as a whole (8) .…”

“…Finally, because skilled and unskilled workers are not interchangeable for employers (9,(17)(18)(19)(20)(21) , it may be that labour market conditions and outcomes differ across skill groups, which in turn affects the risk of a household being food insecure (8) . Using education level as a proxy measure for skill level in the context of the workplace, for an examination of educational attainment and food insecurity by industrial sector, we stratified our sample according to the primary earner's educational attainment.…”

A Micro-Empirical Foundation for the Political Economy of Exchange Rate Populism

“…3 There is a related literature that explores individual survey data to inquire on determinants of individual attitudes towards trade policy. See Balistreri (1997); Beaulieu (2002); Scheve and Slaughter (2001); and Mayda and Rodrik (2005). movements affect the relative profitability of different sectors of the economy (for example, manufacturing relative to services), it also shifts the relative demand for labor of different skills, locations, and sector of employment, among other characteristics.…”